Question

York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
  

Year 1 total cash dividends	$	20,000
Year 2 total cash dividends		28,000
Year 3 total cash dividends		200,000
Year 4 total cash dividends		350,000

Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. (Round your "Dividend per Preferred Share" answer to 3 decimal places.)

Answer 1

Ans:

	Par Value per	Dividend Rate	Dividend per	Number of	Preferred
	Preferred Share		Preferred Share	Preferred Shares	Dividend
Annual Preferred Dividend:	$ 5.00	7.50%	0.375	80,000	$ 30,000
	Total Cash	Paid to	Paid to Common	Dividends in Arrears
	Dividend Paid	Preferred		at year-end
Year 1	20000	20000	0	0
Year 2	28000	28000	0	0
Year 3	200000	30000	170000	0
Year 4	350000	30000	320000	0
Total:	598000	108000	490000

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